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Beer Buzz: Brewing is a business

Although it is a fun and exciting industry to be involved with, a brewery is still a business like any other type of manufacturing company.

The inspiration of this article is derived from seeing brewing operations — and the industry overall — undergoing a major growth spurt.

We frequently get asked, “How did you get your start in brewing?”

Our answers always start off with our story of work experience, education, planning, etc. To us, those are essential aspects needed for opening a brewery.

Let’s quickly discuss the current industry trends and what many of us are seeing as the new standard. You can ask just about any brewery owner who has been around for a while, and they’ll tell you breweries are popping up all over the place.

Do these owners have the experience, knowledge, training and education they need to run and operate a brewery successfully? Maybe so; hopefully so!

The more beer the merrier right? I think we can all agree with that.

However, what about those who just see the craft beer industry boom as a potentially lucrative industry to make some quick cash? Do they care about the beer, the quality and the craft? Likely not. Trust us, they don’t last too long when they realize what’s involved.

There are also those who are advanced home brewers who immediately think they can run a brewery. It is virtually impossible to go from brewing small batches of beer at home to immediately jump into brewing 10, 20 or 30 barrels of beer at a time on the industrial equipment that is required to do so.

By writing these articles, we hope to give you an inside look at the beer industry, different beer styles and virtually anything that could be involved with the beer you drink on a regular basis. This particular article is meant to address a growing concern people in the brewing industry have, which is that many people are getting into the business for the wrong reasons.

If you genuinely love beer, love the process, put the time and planning into a project and do your research, we more than welcome you to our brewing community. Although we can’t speak for everyone, I can safely say this is a good general consensus.

However, if someone sees our industry as a quick way to make some money and doesn’t care about the product or the consumers, they should likely move on to one of the many Ponzi scheme-based investment opportunities found just about anywhere.

We also welcome home brewers to the industry, as that’s how most of us got our start. If you truly love brewing and the craft, you likely got your start home brewing. It is single-handedly the best way to get familiar with the process, ingredients and all the blood, sweat and tears that go into making this beautiful beverage.

As a former home brewer, I personally can vouch that it takes serious time, attention to detail and commitment to produce a great beer on such a small scale. That alone is worth acknowledgment. Even though I considered myself an advanced home brewer, I didn’t have the slightest clue how a real brewery worked, with all of the processes and equipment that were involved. Therefore, I decided to go to brewing school and then get a job at a brewery. I figured that was the best way to learn from the pros how it was done on that kind of level.

For anyone looking to open a brewery, we recommend the same. Get out there and get some experience or go to school for it. If that’s not your cup of tea, then hire someone who knows what they are doing so you can minimize that massive learning curve and start-up pains. Keep in mind that brewing is a business, so it should be treated like one.

When we say brewing is a business, you can apply just about all of the principles of a manufacturing facility to a brewing facility. There are costs of goods sold, inventory sourcing, ingredient contracts, shipping, distribution, labor, utilities, etc. You name it and we likely have it as an expense.

That being said, it is manageable to brew some beers on a small homebrew scale that aren’t economical to brew on a larger scale. Take hops, for example: They make up a large percentage of the cost of the product. If you over-hop a beer and can’t afford to charge more for that beer, you are eating into your margins.

You may not realize it, but most breweries don’t make their money off of their IPA because of the hops required for them. However, they are so popular and market pricing keeps the prices low, so breweries have to take a margin cut for those beers because people love them and that’s how we make a name for ourselves.

When it comes down to it, brewing on a professional level is no longer a garage hobby. You have to make decisions based on how they will affect quality, the craft, your consumers and more while keeping in mind it’s still a business, so there needs to be positive net income.

The main take-away from this article should be that craft beer is a professional industry that we all cherish and strive to maintain. We are all in it together and want to see the beer quality principles remain high while constant innovation and experimentation push the limits of our palates. As a manufacturing industry, we uphold all of the safety and quality control standards that you would expect to see in any other industry.

While it is fun and we love what we do, we didn’t get here without hard work. We have to keep working hard every day to get this beer out to you for your enjoyment. If you’re thinking about getting into our industry, please feel free to contact a local brewery owner or manager. Most of them are happy to spend a few minutes to chat about it.

We don’t have any secrets and we’re here to support each other, whether it’s fellow brewers or newcomers.

Smith Mathews (brewmaster) and Carly Wiggins (marketing director) are the founders of Southbound Brewing Company, Savannah’s only production microbrewery. Go to southboundbrewingco.com or send an email to info@southboundbrewingco.com.